O’Reilly Automotive has announced record revenues and earnings for its fourth quarter ended December 31, 2019. The results represent 27 consecutive years of comparable store sales growth and record revenue and operating income for O’Reilly since becoming a public company in April of 1993.
4th Quarter Financial Results
O’Reilly’s CEO and Co-President Greg Johnson, commented, “We are pleased to once again report another profitable quarter, highlighted by a 4.4% increase in comparable store sales and a 14.2% increase in diluted earnings per share. While our comparable store sales results for the fourth quarter were in the top half of our expected range, we continued to see ongoing inflationary pressures in our expense structure, and primarily due to an unexpected surge in health benefit costs, our operating profit for the fourth quarter did not meet our expectations.”
Sales for the fourth quarter ended Dec. 31, 2019, increased $168 million, or 7%, to $2.48 billion from $2.31 billion for the same period one year ago. Gross profit for the fourth quarter increased 7% to $1.32 billion (or 53.3% of sales) from $1.23 billion (or 53.3% of sales) for the same period one year ago. Operating income for the fourth quarter increased 3% to $442 million (or 17.8% of sales) from $428 million (or 18.5% of sales) for the same period one year ago.
Net income for the fourth quarter ended Dec. 31, 2019, increased $25 million to $325 million (or 13.1% of sales) from $300 million (or 13% of sales) for the same period one year ago. Diluted earnings per common share for the fourth quarter increased 14% to $4.25 on 76 million shares versus $3.72 on 81 million shares for the same period one year ago.
Full-Year Financial Results
Johnson continued, “Team O’Reilly’s commitment to providing the highest level of customer service in the industry, along with our relentless focus on profitable growth, resulted in full-year comparable stores sales growth of 4%, a 5.8% increase in full-year operating profit and an 11.1% increase in 2019 diluted earnings per share. I would like to take this opportunity to thank our team for their continued dedication, hard work and commitment to O’Reilly’s ongoing success, highlighted by 2019 marking our 11th consecutive year of 10% or greater diluted earnings per share growth.”
Sales for the year increased $614 million, or 6%, to $10.15 billion from $9.54 billion for the same period one year ago. Gross profit for the year increased 7% to $5.39 billion (or 53.1% of sales) from $5.04 billion (or 52.8% of sales) for the same period one year ago. Operating income for the year increased 6% to $1.92 billion (or 18.9% of sales) from $1.82 billion (or 19% of sales) for the same period one year ago.
Net income for the year increased $67 million, or 5%, to $1.39 billion (or 13.7% of sales) from $1.32 billion (or 13.9% of sales) for the same period one year ago. Diluted earnings per common share for the year ended Dec. 31, 2019, increased 11% to $17.88 on 78 million shares versus $16.10 on 82 million shares for the same period one year ago.
Johnson concluded, “We successfully met our goal of 200 net, new store openings in 2019, in addition to converting 20 acquired Bennett stores to the O’Reilly brand. Also, we closed on our acquisition of Mayasa Auto Parts on Nov. 29, 2019, and we are very pleased to officially welcome the over 1,100 Mayasa Team Members into the O’Reilly family. The Mayasa acquisition represents O’Reilly’s first expansion outside the U.S. as an international company, and we are excited to work together with the outstanding Mayasa team to build on their history of profitable growth as we enter the Mexican automotive aftermarket. We continued to enhance our industry-leading distribution network in 2019, as we successfully opened our 28th distribution center in Twinsburg, Ohio, and have two additional distribution center projects under construction in the Nashville and Memphis markets, which will both open in 2020.”
Share Repurchase Program
During the fourth quarter, the company repurchased 0.3 million shares of its common stock, at an average price per share of $427.33, for a total investment of $125 million. During the year ended Dec. 31, 2019, the company repurchased 3.9 million shares of its common stock, at an average price per share of $369.55, for a total investment of $1.43 billion. Subsequent to the end of the fourth quarter and through the date of this release, the company repurchased an additional 0.2 million shares of its common stock, at an average price per share of $428.29, for a total investment of $88 million. The company has repurchased a total of 76.4 million shares of its common stock under its share repurchase program since the inception of the program in January of 2011 and through the date of this release, at an average price of $160.61, for a total aggregate investment of $12.27 billion.
The company also announced today that its board of directors has approved a resolution to increase the authorization amount under its share repurchase program by an additional $1 billion, raising the aggregate authorization under the program to $13.75 billion. The additional $1 billion authorization is effective for a three-year period, beginning on February 5, 2020. As of the date of this release, O’Reilly had approximately $1.48 billion remaining under its current share repurchase authorizations
